38 F. 220 -

38 F1d 220

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Case Text

220

FEDERAL REPORTER, vol. 38.

do not usually take such responsibilities, but do usually take prompt measures to obtain security in cases of emergency. No entry was made on the books of the bank squaring or closing the account until after the judgment had been obtained. Of course that merged the account in the judgment. No receipt was asked for or taken by Johnson, nor does the itself purport to be made in full satisfaction of the debt. It recites a consideration of $16,000,-a sum almost twice the amount of the bank debt, and which Park testified included $7,500 of a fictitious charge entered against Templer & Co., at Johnson's request, in Drder to keep other creditors off the property. Under all the testimony and the circumstances surrounding the transaction I can reach no other conclusion than that this transfer was made as security for the bank debt, and not in extinguishment of it. In reference to the cp.arge of $1,375.16, there are some items in it that may well be questioned. In the absence of any authority from the assignors, the custodian of the property would be limited to such expenses as were proper and necessary in the care and preservation of the property. There was such consent to the completion of the building, paying for labor, material, etc. The custodian was justified in keeping the property insured, and paying the taxes, but in this account are the items of $315 for insurance, and several hundred dollars for watchmen for the property. 'fhis being an extraordinary expense, the cashier should have obtained the consent of the owners before making it. With this charge stricken out, the complainant is entitled to a decree and judgment for the amount. of its claim, and it is so ordered.

whenever the state court may do so, it does not authorize an injunction when the board of equalization has acted in good faith, and in conformity with law. as no "legal wrong" has been or will be done, though complainant's property is overvalued.

8.

SAME-FEDERAL COURTS-JURISDICTION.

The fact that a writ of certiO'1'ari has been sued out in the state court to review th.e proceedings of the board of equalization, and that that proceeding is still pending. does not entitle the complainant to apply to the federal court to stay the collection of the tax until that proceeding is determined. as it is clearly within the power of complainant to apply to the state court for such relief. Nor does the general allegation that the people and officers of the c01,ntyare prejudiced against complainant confer any jurisdiction on the federal court.

In Equity. On demurrer to bill. For opinion on motion for preliminary injunction, see 36 Fed. Rep. 854. George R. Lockwood, for complainant. George D. Reynolds, for defendant. Before BREWER and THAYER, JJ THAYER, J. This case is now before the court on a general demurrer to the bill of complaint. When the bill was filed a temporary injunction was granted restraining the collection of certain taxes levied on lands situated in Madison county, Mo. The reasons that induced the court to grant a tern porary restraining order were fully stated at the time. 36 Fed. Rep. 854. The court was then of the opinion that the bill showed that the county assessor, either intentionally, or by a reckless and willful disregard of his duty, had placed a higher valuation on complainant's property than on other like property in the county, and that he had also valued it for the purpose of taxation much above its actual cash value, and that the assessment was for that reason fraudulent. An injunction was accordingly granted on the well-settled ground that a court of equity may restrain the collection of a tax based on a fraudulent assessment, as well as the collection of a tax that is based on a void or illegal assessment. Counsel for defendant do not now controvert eitherof the latter propositions. They contend, however, that while the bill shows that the assessor acted fraudulently in making the assessment, it further shows that complainant took an appeal from such assessment to the board of equalization; that the a5sessor's action was reviewed by that body; that the assessment was reduced to the extent of $40,000; that the bill does not contain any allegations showing that the conduct of the board was fraudulent or illegal; and for these reasons they urge that the court cannot review the action of the board or stay the collection of the tax, although the assessment on which it is based may be excessive. If the board of equalization acted in good faith, and violated no rule of law in acting on the appeal, we think it clear, as the court formerly held, that the valuation placed on the property by the board of equalization is conclusive, and that this court cannot forbid the collection of any portion of the tax on the ground of overvaluation. Cooley, Tax'n, 748, and cases cited. It is necei3sary, therefore, to ascertain precisely what the bill does allege with respect to the .action of the board of equalJzation

222

FEDERAL REPORTMR,

vol. 38.

We. find, on e:l\:amillation, that waa<;luly taken from the action of the assessor to, the board of equalization, and that the appeal was duly heard and argued, and thevaluatidn reduced 1;>y qrder .of the bqard. in .the pefoi-e tM bill proceeds follows:, "'13ctt.,llsyour orator further states, t,he action of ,the !laid ,board of equaliZl\tipn was in itseIt illegal anderrone!>us, that saidboard wbolly ignorlld tbe appeal aud evidence in the calise offered to sl,lstain the same, and procet'ded without any authority whatever in law, and without, as your orator states, any jurisdiction so to do, to fix the val ae of said' part of survey 2,963 at the sum of $360,000, and the valuation of said pine land at the sum per acre,; that,as your was advised and believes, the of equalization had no jurisdiction or autJlOrity in the preJ;llises, except to hear and determine your orator's said appeal'in a s'ummary manner, ahdby their findings to sustain or refuse the same in pursuance of the la wand the evidence in the case; that the action of said board of equalization was not the result of any negligence or default on the part of your orator, but, on the contmry, your orator furnished the board, by affidavits and oral testimony, the means of arriving at a true and. jnst conclusion as to the merits of said appeal, and was present by his' attorneys; and ready and Wilting to furnish to said l>oard all the necessary information and evidence In his power, to aid them in arriving at Ii Just, true, and equal valuation of' any and all of his said real estate being situate in the said county of Madison..' This the only averment that we find affecting or tending to the action 'Of the board of equalization.. 'The idea that underlies this allegation of the bill seemS to be, that the board had no power or authority, on appeal,to correct or alter the assessment as made by the assessor, or to fix the true value of complainant's property. In other words, the contention seems to be that the board should have set aside the assessment when it was found to be excessive; and should have referred the matter to the assessor for a new assessmep.t, instead of reducing the valuation to what they deemed the proper amount; and that, because the board fa:iledto act in the manner last indicated, its proceedings were illegal. Although the bill avers that the action of the board "was itself illegal and erroneous in that the board wholly ignored the appeal and evidence in the cause offered to sustain the same," we think it fair to assume, in view of the context, that no more is meant than that the board mistook itS duty under the law, and undertook to correct the error of the assessor by reducing the v/tluation, whereas it only had power to set aside the assessment, and remit the case to that officer for a revaluation, or with directions, perhaps, how to proceed. If the action of the board was illegal in any other respect it is not stated j and we will not assume that its actions were illegal, unless facts are alleged showing wherein the illegality consists. Furthermore, the charge that the board "wholly nored the evidence offered to sustain the appeal," on which some reliance seems to be placed, appears to us to be entitled to no weight, unless understood. in the 'sense above explained. All courts, and exercising quasi judicial powers, that are empowered to hear and decide questions of fact, have the right to ignore testimony on many grounds; irrelevant, or believed to be prejufor example, because it is

as

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diced, or false; and when a general charge is made as in this bill that a court or board ignored testimony, without further explanation of the character of .the discarded evidence, the presumption is that it was properly ignored for some of the numerous reasons that will justify Buch actiqn. ::rn the present instance, however, it is obvious that complainant's was not wholly.ignored, as the bill shows that the board made a large reduction in the valuation. Now, with respect to the point that the board of equalization cised powers not vested in it, and that its action infixing the value of cOUlplainant'B property on appeal was illegal, it will suffice to say that in our opinion the point is not tenable. We hav.e no doubt (looking merely at the averments of the bill) that the board acted in strict conformity with the powers conferred on it by statute. Sections 6672, 6673, and the first paragraph of section 6674, Rev. St. Mo., which define the powers and duties of such boards, are as follows:
"Sec. 6672. Its Powers and Duties. Said 'board shall have power to hear complaints, and to eql,l.alizethe valuation and assessments upon all real and personal property within the county which is made taxable by law, and. having each taken an oath, to be administered by the clerk, fairly and impartially to equalize the valuation of all the taxable property in such county, shall immediately proceed to equalize the valuation and assessment of all such property, both real and personal, within their counties respectively,s0 that each tract of lll;nd shall be entered on the tax-book at its true valuej provided, that said board Shall not reduce; :valuation of the real or personal property of the county below the value thereof, as fixed by said state board of equalizaws1872, p. 87, § IIV'. . tion. "Sec. '6673. Rules to be Observed. The following rules shall be observed by county boards of equalization: First, they shall raise the valuation of all such tracts or parcels of land, and any personal property, as in their opinion have been, returned below their real value, according to the rule prescribed by this act for such valuation; ,* * * second, they shall reduce of such or parcels of land, or any personal property,which, in their opinion, have been returned. above ,their true value, as c01Dpared With, the ,av7 erage valuation of all the real and personal property of their county. Laws 1872, p. 87, § 16. . . "Sec. 6674. Appeals from Asses/Jor's Valuation-,-Erroneous Assessment. Tbe said board shall bear imq 'determine all appeals made from the valuation of property, made by the assessor, in a summary way, and shall correct . adjust the assessment accordingly. * * * Laws 1872, p. 88, § 17g."

It is manifest, we think, from a casual reading of these sections, that boards of equalization, on the hearing of appeals from the assessor on questions of valuation, have the right to determin13 the true value of the property in controversy, and.to ,order the assesSllient roll to be corrected, either by raising or lowering assessor's valuation, so as toconfol'm the practical conto the views of the board. ,Such has always struction of the statute, and we entertain no doubt that it iscorr iCt.· That being tile case, it follows, in view of has been said, that the bill fails toshow,that the conduct of the boarQ. of, equalization was illegal or fraudulent in any such sense as would authorize this intervaluation. it.llas fit to place on cQmplainant's property. fere with On quelltiOI)S 9f, .lIlat sor.t tl,le dl;!cisions of such boards are finalsp 100)g

224

FEDERAL REPORTER,

vol. 38.

as they' act in good faith, and in conformity with the laws regulating their action. If through an error of judgment property is valued too high, the wrong done to the tax-payer admits of no redress. It is insisted, however, by complainant's counsel that the bill shows that complainant is entitled to equitable relief on other grounds than those heretofore considered. In the first place, it is said the bill shows that a writ of certiorari has been sued out of the circuit court of Madison <:Ot1nty, Mo., to review the record of proceedings of the board of equalization; that the proceeding is still pending and undetermined in the state court; and that complainant is entitled to apply to the federal court to stay the collection of the tax. at least until the certiorari proceeding shall have been determined by the state court. It is obvious that if the bill is upheld on the ground last suggested it is not with a view of obtaining any independent final relief in this court, but merely for the purpose of rendering the jurisdiction of the state court effectual to redress the alleged grievance. But a bill of that character cannot be entertained by us if it is within the power of the complainant (as it clearly is in the present case) to apply to the state court for such relief. If complainant fears that the litigation now pending in the state court will prove fruitless because of action that may be taken by the collector of Madison .eounty before such litigation is ended, he should apply forrelief to that court, whose judgment is about to be rendered nugatory. This court will certainly not interfere merely to stay proceedings until the <:ase pending in the state court is heard and determined, unless it appears that for some good and sufficient reason application cannot be made to the state court; and we do not consider the general allegation in the bill that the people and officers of Madison county are prejudiced against the complainant as any excuse for not applying to the state court for the relief now sought here. The tact that such prejudice exists does not <:onfer any jurisdiction upon us to stay the collection of the tax until the state court has pronounced judgment. We cannot entertain jurisdiction of a proceeding, even between citizens of different states, that is merely ancillary to a suit between the parties pending in a state court, when it is manifest that the incidental or temporary relief sought may be obtained by application to the court having jurisdiction of the main cause. To warrant this court in entertaining the present bill the bill must contain some allegations entitling the court on final hearing to grant relief on independent equitable grounds, without reference to the proceedings pending in the state court. It is finally insisted that the bill shows that the value of certain personal property of the complainant, consisting of tools and machinery, on which the taxes had already been paid, was included ill the assessed value of the real estate on which such tools and machinery were located, and hence that the bill makes out a case of double assessment of certain property, against which the court can afford relief. Also that the bill ehows that certain real estate which does not belong to defendant has been assessed as his property. We do not find anywhere in the bill 8 distinct averment that any personal property on which the tax had been

HAZARD'll. O'BANNON.

225

paid, was assessed a second time as real property. If such is the fnct, a distinct averment to that effect should be made; and, if any relief is sought on that ground, we shoulrl be advised by proper allegations of what the property consists, what is its value, and to what extent the is excessive on that account, as we can only stay the collection of so much of the bill as is excessive. We think the averments of the bill are insufficient to warrant any relief on the ground last suggested. At most, the complainant only avers that the value placed on certain mining lands by the assessor, is greater than the combined value of the that the tax on lands and the tools and machinery located thereon, such tools and machinery has already been paid. This falls far short of an averment, that the assessor actually valued personal property as realty after it had been taxed as personalty. With respect to the contention that property which did not belong to the complainant was assessed to him as his property, we think it only necessary to quote the following paragraph of the bill, upon which such contention seems to be based, to-wit:
.. That the assessor did proceed illegally to assess the lands of your orator in the county of Madison, commonly known as · pine lands,' * * * in that 800 acres of said land so assessed to your orator were not the lands of your orator, nor was he in anywise liable for said assessment. 'rllat the acreage of land actually owned by your orator as fixed by said assessor is 507 acres in excess of the true acreage; that is to say, that said assessor did wholI;r fail to assess to your orator owned by your orator in said township containing 748 acres, as will more fully and particularly appear by the tabulated statement hereto attached. "

This allegation is so contradictory that we are unable to determine what the pleader intended to aver, and the meaning is not made apparent by any other averment, nor is there any tabulated statement annexed to the complaint such as is referred to. For these reasons the paragraph last quoted clearly does not entitle the complainant to any relief. . It was also contended on the argument (as we understood counsel for complainant, that, inasmuch as the bill alleges that complainant's property was overvalued for the purposes of taxation, both when consiqered by itself and in comparison with other like property in the county, an injunction may properly be awarded on final hearing to restrain the collection of that part of the tax which is excessive, by virtue of section 2722, Rev. St. Mo., which provides that "the remedy by writ of injunction * * * shall exist in all cases where an injury to real or personal property is threatened, and to prevent the doing of any legal wrong whatever, whenever, in the opinion of the court, an adequate remedy cannot be afforded by an action for damages." The obvious answer to this contention (conceding that the section quoted confers on the federal court the right to award an injunction whenever a state court might do so) is that the bill does not disclose that any "legal wrong" has been done to complainant, unless it appears that the board of equalization acted illegally or fraudulently in the matter of assessing his propv.38F.no.3-16

226

FEDERAL' REPORTER,

vol. 38.

erty.If tlie board acted in good'faith, and in conformity with law,no legal wrong was done or will be 'done,even though complainant's propertr was overvalued. Therefore the section of the state statute last referred to' does not aid the case made by the bill. Under the circumstauCes, and for the reasons heretofore given, we conclude that the bill does 'hot show that the complainant can have any relief in this court. We accordingly sustain the demurrer. Judge iBREWER concurs in' the decision.

HOUCK 11. SOUTHERN PAC.

Ry. Co.

(Ot'rcuit Oourt, lV. D.

November 16, .1888.)1

PERSONS·

C..uuuERB OF PASSENGERB-DrsCRDUNATrON AGAINST

. Arailway company, in "the management of its complicated interests, may be authorized in law,......on showing a proper or sufficient state of facts, to estabUsh In the opinion of the court the reasonableness of the rule,-in setting apart one or more cars for the use exclusively of colored passengers, and a like number, more or less, as the service may require. for the use exclusively of white passengers; but whenever the company enforces such a rule the is. cbarged with the duty of furnishing to colored people who par 'tirst,classfare cars to ride in that are as safe and comfortable in their condl- '. tions' and appointments as the cars furnished to white passengers who pay' first-class fare. s . b1l theo.ov.rt.)

At Law. On motion for neW trial. Actioiiby Lola Houck against the Southern Pacific Railway Company, for persona.! injuries. Judgment for plaintiff, and defendant moves for' , new trial. ' ' Wheeler & ;Rhodes and Labatt & Nobles, for plaintiff. . Waul & for defendant. . J. Plitl.ntifrclaimsdamages in the sum of $7,500 against defendant railway company for personal injury to Mrs., Houck. The un-: disputed e:vidence in the case shows that Mrs. Houck is a young married degree of negro blood in her veins; that qasually lookwoman with or her husband it w()uld be difficult to distinguish either of ing at that sheisa grad uate of oneofthe high schools them froni where color.ed persons are educated for school teaching, and in at their h<?me, Victoria, Tex., as reshe and her ,hu,sbandwere. 'that she was, at the time mentioned in her spectable some exteJ)t pregnant, but otherwise in good health; that,
, , ",. · ,. '. I ·

'Publication, delayed by failure to obtl'in copy of opiniOn at the time of ,its delivery. 'See, on subject of discrimination 8gainl!lt colored persons by carriers and others, McGuinnV.Forbes, 37 Fed. Rep. 639, and note.